Thinking of jumping into the Bay Area home market? Beware: Mortgage rates have been on the rise again in recent months — and are threatening to top 7% before the end of the year.
Home seekers who had been holding out for rates to drop are accepting the increased borrowing costs just in time for the summer homebuying season. It signals something of a return to normalcy following a pandemic real estate boom that sent prices soaring to all-time highs and rate hikes that then brought them back to Earth.The Bay Area’s $1.3 million existing median home price in June represented a 1.8% bump from May, according to the California Association of Realtors.
The average 30-year fixed nonconforming home loan, meanwhile, rose to 7.2% on Thursday, according to Bankrate.com. In the Bay Area, a nonconforming loan, also known as a “jumbo” loan, is a mortgage that exceeds $1,089,300 for a single-family home. The region’s chronic housing shortage is largely to blame. But mortgage rates are also playing a role in the lack of supply.